Over the past year, the price of a single family house in Vancouver increased by an incredible 30%, to an average of $1.4m. It’s just the latest, most dramatic jump in an already dramatic long-term trend that has turned the beautiful but unassuming Canadian city into one of the world’s least affordable, with a housing price-to-income ratio of 10.8. That’s third after Hong Kong and Sydney, and well ahead of London, which ranks eighth at 8.5.

Driving the rise is an unprecedented flood of foreign capital, mainly from China. “What you have is a huge pool of very wealthy people who want to hedge against uncertainty back home,” says Thomas Davidoff, a real estate economist at the University of British Columbia (UBC). “Combine anxious money – a lot of it – with a beautiful gateway city that has limited space to build, low property taxes, lax regulation on capital flows, and wealth-friendly immigration programmes, and you get a market like this one,” – a market where an ordinary house with a waterfront view can sell for $15m while people earning local wages struggle to buy or rent a home.

In spite of spiking inequality, policymakers have been slow to acknowledge the problem of foreign capital. Public debate about Vancouver’s affordability crisis has, until recently, been surprisingly circumspect – due in no small part to a very Canadian discomfort with talking about race.

Canada has long targeted “anxious” money from Asia. Right now, if you invest a five-year, interest-free amount of $800,000, you can effectively buy citizenship. (By contrast, a similar scheme in Britain, the Immigrant Investor Programme, offers citizenship for between £2m and £10m.) Such programmes have driven the globalisation of Vancouver’s real estate market. They were created in the 1980s with Hong Kong’s elite in mind: millionaires arrived by the thousands from Hong Kong ahead of the 1997 handover to China, and there was tension in Vancouver then, too.

What’s different about the current wave of wealth migration is the scale and speed of it. “Hong Kong is a small territory,” Ley says. “With China you have an amazing depth of capital – capital which is more and more eager to leave the country.”

That capital is turning Vancouver into a resort town for the wealthy. Heritage homes are being knocked down and replaced with mega-mansions. Teenagers drive quarter-million-dollar Lamborghinis. Nowhere is the fascination, scorn and exaggeration to which these gaudy lifestyles of the Asian nouveau riches are subject better exemplified than in Ultra Rich Asian Girls of Vancouver. The reality TV show follows the daughters of elite Chinese families as they float through a Vancouver that would be unrecognisable to most Vancouverites – including, probably, some of the ultra-rich the show purports to represent.

While some economic migrants do start businesses here, the problem with Canada’s cash-for-citizenship programme is that it doesn’t encourage long-term investment or entrepreneurship beyond the initial outlay of money. Millionaire migrants might as well establish their families in Vancouver and continue to build their fortunes in China – and they do. A study by the Canadian government shows that, 10 years after arriving in the country, immigrants who used the investor programme declared marginal incomes, and paid only a fifth as much income tax as other Canadians.

Understandably, this outrages people. “If someone wants to live here, they shouldn’t just be parking a family here and earning all their money elsewhere,” says Raymond Wong, an engineer who grew up in east Vancouver, a traditionally working class part of the city that has seen prices skyrocket. “They should be contributing to the economy, putting down roots, fitting into the culture.”

Compounding the frustration is the fact that, according to experts, a major portion of the money flooding into the market is hot. Officially, the Chinese government limits the amount of money individuals can take out of the country per year to US$50,000. Wong recently launched an online petition to strengthen Canada’s notoriously lax federal anti-money laundering measures. It has attracted more than 10,000 signatures.

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Sums up much of the current state of play today. Money is being moved around the world, hedged here, hedged there. Money talks, so money buys you citizenship, and money tempts law-makers to ignore societal problems of using property as a money-dump. London, Sydney, Vancouver - all the same. What a mess.

Share this post

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Sums up much of the current state of play today. Money is being moved around the world, hedged here, hedged there. Money talks, so money buys you citizenship, and money tempts law-makers to ignore societal problems of using property as a money-dump. London, Sydney, Vancouver - all the same. What a mess.

...til 17million people say enough is enough and start hanging banks from lamposts.